Cash ISA changes could be back on the table in next month's Budget as Rachel Reeves looks set to revive plans to reduce tax-free savings despite a backlash over the summer.

Currently, ISAs allow savers to deposit £20,000 each financial year to earn savings interest without tax liability. They can take the form of Cash ISAs or stocks and shares ISAs but you cannot exceed £20,000 deposited across every ISA account combined.

Financial firm Fidelity had been encouraging the government to cut the Cash ISA limit specifically, down to as little as £4,000, in a bid to encourage savers to use stocks and shares ISAs instead of cash ISAs.

But months of speculation about possible reductions to the tax-free allowance over the summer ultimately came to nothing, after the Chancellor was hit with widespread pushback.

But according to a report in the FT, Labour is set to take another look at Cash ISA rules with a view to encouraging more investment into stocks and shares, especially in UK stocks.

While Rachel Reeves has gone on record to commit to the overall £20,000 annual ISA limit, she could instead cut the Cash ISA limit specifically.

In July, Miss Reeves confirmed in a Mansion House speech that 'further changes to ISAs' were still being considered in a bid to get 'better outcomes for UK savers and the UK economy'.

She said: "I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach we are united in wanting better outcomes for both savers and for the UK economy."

Now it has been reported that the Treasury could reduce Cash ISA limits in half, down to £10,000. The FT reports that "a person close to the process said the Treasury was considering a £10,000 annual cash ISA limit, higher than the £5,000 previously suggested by industry figures".

Another possibility is that Labour revives a Conservative plan to create a 'Brit ISA' giving savers an extra £5,000 tax-free to use just for UK equities.

Earlier this year, Michael Summersgill, boss of finance firm AJ Bell, urged the government not to cut Cash ISA limits.

He told the FT such changes "would not have the desired effect of getting people investing."